The only thing this performance needs is five more mics on the snare drum. kickdrum-kickdrum….BANG.

Anyway, enjoy.

Earlier this year I interviewed with Google. I am not a software engineer so if you are interested in all the fun trick questions they ask then I have no insight to offer. I also interviewed in Austin so no one “famous” stopped by or anything notable like that.

The office I interviewed in is primarily sales and recruiting. The office seems to exist as a way to tap in to some of the technical talent in Austin and help get that talent to Mountain View before it is swallowed whole by Facebook or Twitter or any of the other rapidly growing software organizations out there.

When I arrived at the interview I signed in on a touchscreen computer, was given a visitors badge and waited for about 10 minutes before my interviewer arrived. The Austin office is on the 4th or 5th floor (can’t remember) of a nice building in the Arboretum area. The view to the outside was nice but inside was even better. A big cafe with food and snacks and a big cooler of drinks. Lots of comfortable places to sit and work. Very interesting decor (Star Wars stuff, a wall made of different colors of floppy disks, a stack of 8-track tapes put together to create artwork) and different work spaces for teams to gather and GSD. Pool table in the break area, monitors and touchscreens all around for some sort of use as needed. The main thing I noticed, however, was how quiet the office was. My expectation of a sales and recruiting environment is lots of talking on the phone and lots of people pounding on keyboards as they type with great vigor. Didn’t hear any of that.

The interview itself was broken in to two parts. I spoke with one person for about 30 minutes and then another for the same duration. They had both been with Google for a few years and had started working in Mountain View before being transferred to Austin to help get this office off the ground.

The first interviewer asked me why I wanted to work at Google and I gave what I thought was a very good and honest answer: Google likes to build things that change the world. Being a part of a team that builds things that change the world greatly appeals to me. Then things got weird as he replied, “So you just want to work here so you can put ‘Google’ on your resume?” I certainly didn’t feel the need to leave that hanging in the air so I explained further that I admired Google as a company, had used many of the products, felt I’d be a strong addition to the team due to my experience, and that of all the company’s I admired I had a great appreciation for the lofty goals the company seemed to set for itself. I admire the company and would like to be part of it. Again he replied with the accusation that I just wanted to padmy resume, which was silly because (1) I’m not technical so having Google on my resume wouldn’t be of any great benefit and (2) I thought I had already explained that wasn’t the case.

Then the interviewer asked me why I thought I would be good at the job and I described how my skill set would translate to the position as it was explained to me in the pre-screening. He took this opportunity to point out that the pre-screening explanation was not very clear and informed me that I didn’t really know what position I was interviewing for. So we spent 10 minutes with him telling me what the position was and me reframing all my answers to fit that. This is about the point I realized there was no chance in hell I was getting hired by Google. Aside from the notoriously high standards the company holds for all positions, it is very apparent that a person needed an advocate on their side from the start. I determined that my interviewer did not have a good impression of me because he thought I was resume padding (no) and came across as slick (yes), overconfident (guilty), and confrontational (probably). We finished our 30 minutes with him being insulted when we had this exchange:

Him: “If you were to get this position, in management, how would you inspire the people who report to you?”

Me: “I don’t think managers can inspire people. A person either wants to work hard or they don’t. I’m a grown up and the people that have worked for me are grownups. They either come to work and do their job or they don’t, at which point I’m fine suggesting that they find another job.”

Him: “So you’re saying I don’t inspire my team? I think that’s the core of my job…inspiring them to do a good job every day.”

Me: “No one can inspire someone else. It isn’t a gift you bestow on others…people are responsible for their own motivation. You can create an environment where they want to work hard and where they can succeed, but I don’t think inspiring people is something that can be quantified by management.”

First interview over.

The next guy was much more laid back and we built a much easier rapport. We talked a lot about Austin and a lot about him and a lot about my experience. I was much more relaxed because I knew that while we were talking the first interviewer was entering a scathing review of me on his system and this would be my last time in the building.

I turned my visitor’s badge in and waited for the elevator downstairs. Both of my interviewers appeared as they were heading down to a meeting. I thanked them both for their time and entered the elevator. They both declined to join me, opting to wait for the next one.

I am overly qualified to talk about management because I have been good at it for a long time. Before I was good at management, however, I put in extra time being awful at it. Downright terrible. I have managed more than a couple organizations down in to a black hole of failure. I’m qualified to write about management not because I am good at it now, but because I was able to realize just how awful I used to be at it and make changes. Most managers are terrible at “managing” things and never realize it. Thankfully for them, large organizations with poor management have a way of gelling in to mediocre companies so everyone gets off the hook. It’s all relative. But if you want to be a good manager you have to realize that – like everything else – when you start at it you are beyond terrible and realizing how terrible you are is the only way to get on the road to improvement. People who think they are “born leaders” or who were promoted into management because of success in a non-management position start off as awful managers too.

Anyway, a friend asked me recently for recommendations on management books and I told him I could teach him to be a good manager in 800 words. It might take a little longer than that but it shouldn’t be by much. Let’s get started.

How to be a good manager:

You are their boss, not their friend. If you want to be “liked” then join some social groups outside of work. Not to say everyone should hate their boss (and you are the boss) but joining your reports in fantasy football leagues and poker games and chats around the water-cooler is the first step towards hearing about their personal problems and excuses for why they aren’t doing a good job. And once the door is open a little it will eventually be open a lot and you will be stuck as a bad manager.

You do not want to manage your business or group “like a family.” Most people already have a family that drives them nuts and includes drama and craziness and disfunction somewhere in it. Making your business “a family” is a disservice to them. It’s a business and employees will be glad that you treat it as one.

Create an environment of success. From providing tools (CRM software, training, etc.) to making sure the coffee pot works, your first job as a manager is to make sure your reports have everything they need to succeed. You should create a space where they can focus on their work and not be distracted by annoying things that take away from their individual missions.

Compensation is the best predictor of behavior. If you want your salespeople to focus on selling widget X instead of widget Y, pay them more for selling X then Y. If you want your supply chain to deliver one day ahead of expected schedule, pay your supply chain team more when that happens and less when it doesn’t. If you want your drivers to return the trucks to the yard with a full tank of gas, pay them more when that happens. People will do what is in their own best self interest financially. Pay them extra when things happen EXACTLY as you want them to happen. Pay them less when they don’t.

Measure absolutely everything. Every business has a formula for success. In sales that formula might be something like this: $20,000 of revenue can be achieved by making 40 outbound cold calls each day, setting 5 appointments each week, and signing one contract each month. Finding the formula is your job and the only way to do so is to have data that you can measure. Once you’ve discovered the right formula…

Trust but verify. Your inventory guy said he counted each item twice as it came through the door? Excellent! Subject him to regular spot checks. Your salesperson said they made 30 calls today? Great! Check the CRM software and/or call log. Your formula will only work if it is being enforced 100% of the time. And the only person who is going to enforce it is you.

Be clear on expectations. Every employee needs to know exactly what you expect of them at all times. They need to know what part of the formula they are responsible for. You expect a salesperson to have 10 in-house product demos each week…your accountant is to have the previous day closed by noon the next day…your nurse staff is to have all patient follow-up calls logged by Friday close…your scheduler needs to deliver a build forecast at 4pm every day…whatever. Be crystal clear on expectations and if the employee doesn’t understand, work with them ASAP until they do.

Be fair. If you’ve communicated expectations clearly then the employee knows exactly what they are supposed to do. EXACTLY. If they don’t meet expectations for the period of one month, tell them you expect immediate improvement and work with them as much as you have to to help them. If they don’t meet expectations the next month invite them to work somewhere else. Seriously. It’s not working for some reason (bad fit, bad employee, bad teaching, whatever.) But take their badge and walk them to the door. Two months of poor performance can be covered by other team members and can be recovered from quickly. Any longer and a culture of failure-acceptance is created and you will NEVER get it out of your organization.

A quota is the MINIMUM expected level of performance. Most large organizations set quotas or measurable goals for everything from sales to recruiting to whatever. ANd many of those organizations don’t put a person on “probation” or “work review” until they have fallen below 80% of quota. That makes no sense – why not just make the quota 80% of the original number? A quota should be the benchmark of what you expect; anything less is unacceptable and “missing” two periods in a row (month is shortest, biannual is longest) is an invitation to work somewhere else.

Meet with your reports all the time. Most people hate when their boss is always asking what they are doing or what is going on. If those types of people work for you invite them to work somewhere else. A boat or airplane only reaches its destination by constantly gathering feedback and recalibrating direction. Your group/org is the same way. You must constantly be gathering info…is everyone making enough sales calls or taking enough meetings? Is everyone pulling inventory for upcoming builds on schedule this morning? Are they still doing so after lunch? Go on customer visits with salespeople…listen in to phone calls on the support queue. EVERYONE in the organization should be held accountable all the time for the work they are expected to do. And they should know that at any given moment you might be standing over their shoulder making sure they are doing what is expected.

No one deserves a raise – ever. If your compensation plan provides for bonuses/commissions that are tied to expected performance than that is enough. As my friend Rick (VP at a multi-billion $ company) tells his reports: “Your raise becomes effective as soon as you do.”

Do not tolerate excuses. Experienced workers, especially salespeople, will have excuses for why they need a raise or a larger expense allowance or a day off for something or whatever. Do not fall for it. If you have communicated expectations clearly (which includes how much time off people are allowed and how commissions/bonuses are structured and paid) then the rest is none of your concern. If people can not follow the expectations then invite them to work somewhere else.

Salespeople – a MAX of a 90 day draw against future commissions. 90 days is enough time to get ramped up and see results. If you don’t believe me, hire two people of equal talent/experience and give one a 6 month draw and one no draw at all. The person with the 6 month draw will start selling in month 7. The person with no draw will start selling right away.

Don’t hire salespeople that insist on a larger or longer draw. If your compensation plan shows a realistic path to reaching personal financial goals then that should be all that matters. You want salespeople that are motivated to get out and work hard and achieve those goals. People insisting on large base salaries and extended draws are looking for a place to collect a paycheck and will disappoint you and you will eventually invite them to work somewhere else. The ONLY exception would be if your organization has no existing sales infrastructure and you are starting from scratch. Getting the ball rolling from absolute zero is a challenge – find the right person to invest in and give them some latitude.

Interview people all the time. Even if you don’t have any openings its a good idea to interview people and keep a pool of potential candidates available. If everyone is meeting expectations and following the formula then the business will grow and you will already be set to hire. Plus your current employees know that they are dispensable – if they aren’t meeting expectations you can have them replaced by tomorrow morning. As a final benefit, word will get around to your competition that you are hiring (even though you are only interviewing) which will cause their best workers to call you looking for a better job. Seriously.

Obsess over the “key thing.” In every business the most important thing is cash flow, which is a result of profitable sales. However, getting to profitable sales can be a function of having a great product or running an on-time supply chain, etc. Find that thing and obsess over making it perfect. If your business is manufacturing, for example, then every minute that the line is not operating on-schedule is money lost. You are paying wages to people who are standing around waiting on the line. You are paying extra freight costs to get the missing component their on time. You are paying extra long distance to call and apologize to your customer for missing their target date. Find the thing that matters and focus on it all the time. Make sure your entire team knows how they are doing when measured against that “one thing.”

Show everyone how everyone else is doing. The metrics that you are obsessively measuring need to be available for all to see. If Paul is outselling Joanne by 200% then they both need to know it. If Fran is processing more orders at 100% accuracy then Edgar than they both need to know it. “Praise in public, critique behind closed doors” is stupid and a waste of time – you don’t have to do either. Let employee performance serve as the only praise or critique they need.

Run through walls for them and they will do the same for you. Perhaps my favorite manager ever was a man named Charles. He now owns some successful restaurants of his own but at the time I worked for him he was the General Manager of Iron Cactus here in Austin. The place had been open about a month and was PACKED every night from Happy Hour to close. It was a lot of fun to work there because the money was good and the people were so happy. Charles followed all the mantras above (although I didn’t realize it at the time) to make sure the place was running at optimal efficiency. He worked with waiters to make sure we were upselling and worked with cooks to make sure food was consistently good. He worked 18 hours a day and never complained – he was dedicated to the formula and never let up for a moment. One night, an argument broke out at the bar. The place was full as usual and a patron was insisting he had paid for his round of drinks with a $100 bill. Jeff, the bartender, had given him back change for a $20. The patron was making quite a scene and swearing and calling Jeff a thief and generally disrupting the good time being had by all. A crowd of employees and other patrons had gathered. He asked for the manager and Charles appeared. The Patron explained the situation saying he’d paid with $100 bill and the “lying” bartender was trying to steal from him. Charles responded without delay by asking Jeff how the man had paid. Jeff replied, “I swear to God, Charles. He gave me a twenty…you can check my drawer.” WIthout batting an eye (and without checking) Charles pulled five $20 bills out of the drawer, handed them to the Patron, and said, “Get the #### out of my bar” before going back to work. Looking later confirmed that Jeff had been telling the truth – the man had indeed paid with a twenty. But from then on, Charles never had a problem getting Jeff or any other employee to work hard; none of us wanted to let him down when we knew he had our backs. He trusted us to do the jobs he expected us to do, and we knew we could trust him to create an environment for success for each of us.

Some of these rules may seem harsh or not the way you do things. That’s fine. You might be able to succeed another way. But I do know that following each of the rules above works. Follow all of them all the time and your business will succeed. Following some of them some of the time may lead to success as a manager, but it will take longer and be harder earned.

I have a lot of friends that own businesses. In the last four years, each of them (myself included) has had good times and bad. We’ve each had months or quarters where business is booming and months or quarters where there simply seems like there is no business to be had. However, one thing has been consistent with each of our struggles and successes: being non-essential makes you expendable.

(Frightened Rabbit – The Woodpile. Dig it. (although it is a little disturbing…sorry))

Janet has owned a dog-walking and dog-poop-yard-pickup service for a while. She didn’t buy a franchise but rather started from scratch on her own. First she signed up neighbors and eventually started doing some light advertising in the local paper. There are times when Janet spends four or five hours in the morning and three hours in the evening walking dogs and cleaning yards. No, it’s not glamorous but she owns the business, sets her schedule, and makes a lot more money than you might imagine. Two summers ago an odd thing happened: she started getting a lot of cancellations, primarily for the yard cleanup (typically done once or twice a month depending on the number of dogs and their size). People were saying, “We’ll have you keep walking Fido each morning but let’s cancel the yard stuff for a while, okay?” They didn’t want to clean the dog-doo out of their yards if they didn’t have to, but they would do it in a pinch. However, walking the dog when they were at work or on a business trip? That HAD to be done. Janet was smart enough to recognize this and quickly redoubled her dog-walking efforts and focused on that. Now she primarily walks dogs and house-sits for their owners. And she doesn’t clean many yards at all. She recognized what part of her business was “essential” and what part wasn’t.

My friend David has an HVAC repair business. His work is essential where he lives in the south because most offices can’t have their employees working without proper air-conditioning. He’s never seen a drastic downturn due to being non-essential. But right now his business is slow. Why? Because smaller companies are putting off the repair until it starts to heat up outside. They’d rather tolerate a little bit of discomfort then spend the money right now. His business will no doubt pick up as winter thaws in to spring. And by summer he’ll no doubt be putting in 10 hour days like he does every year when it warms up. But for now he’s working for big customers and getting very few bites from small businesses and landlords of vacant commercial properties.

When things get tight financially, people first look at what they can put off. Let’s get a swimming pool next year. Let’s not get the yard service started just yet. The main reason cable companies tie customers in to annual contracts is so they have leverage in negotiating with content providers. The second – and nearly equally important reason – is because when people decide to reduce their home expenses the main “Disposable” item that stands out is the cable bill. So the cable companies are smart enough to make it nearly impossible to cancel DirectTV or Dish or ATT “for a couple of months” until things get better at home.

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The best way to build a business is to offer something unique and essential or scarce. Caskets are pretty recession proof. Ranch land doesn’t often go down in price even when the broader housing market is collapsing. Having a product or good that is not easily replicated is a great way to make money. Yes, it’s also the most capital intensive.

The next best way is to offer a service that is essential. HVAC repair or tax-preparation services. A customer might be able to do these things themselves but most people know they won’t get the desired results without a professional helping them. Offering a specialized service is another great way to start a business, although you can’t just wake up one morning and be “specialized”; you will likely need some training along the way that isn’t readily available to everyone else.

Next is offering something unique and non-essential. No one NEEDS a Mercedes, but the uniqueness and quality of the product mean that sales will continue even in a bad economic climate. If you are the only person making an adapter that converts an iPad to a guitar amp then you will have cornered a market….just be prepared for market demand to be out of your control. (*Note – a lot of companies make this product, but it was a quick example I thought of).

The worst business to have is offering a service that is non-essential. If you offer a service that serves to save only time or money for the customer (which is basically the definition of “service”) then you had better be damn sure that you are saving them either a LOT of time or a LOT of money. It’s nice to have a detailed car, clean and shiney and good as new. But when people tighten their purse strings it’s easy for them to justify buying some Armour All and washing it on their own instead of paying someone else $30 to do it. If you are in the enterprise space and offering engineering services, for example, then you need to make sure your price is low enough or your quality superior enough that your customer doesn’t go hire their own in-house engineer to save money.

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Interesting is the case of Dell. I’m of the opinion that Dell went from being a unique/essential company to a non-essential company. Years ago, buying a Dell computer meant a product 100% specific to you. Choose your processor, swap out the memory, add a bigger hard-drive…presto. Add in extremely good customer service and competitive prices and there was a time a decade-or-so ago that buying a computer OTHER than a Dell was a questionable choice if you had time to wait for Dell to build what you wanted. However, for some reason Dell started in to the commodity battle with IBM and HP/Compaq. Gaining market-share trumped being unique. They made computers that were not customized and fought with the competition in a race to the bottom on price. Suddenly buying a Dell was not special; it was a decision motivated by availability, aesthetics and price. As a result, the dream of being a $100B company vanished in to thin air. To the company’s credit, they appear to be moving back to essential/unique by offering total solutions in the enterprise space like IBM does. I’m optimistic about the company’s future but imagine there are a number of people in-house who wonder where the company would be if it hadn’t taken a detour from what made is special in the first place.

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If you were starting a business tomorrow I’d suggest you build something unique. It doesn’t have to be “new” or a better mousetrap or a machine that turns sand in to oil. But the people and companies that MAKE things are in substantially better shape then those that resell what others make. Unique is always better than common. Essential is always better than not.

“I packed up my things and left all my doubts…you know I think I will grow my hair back out”

I had a dream last night that I got a job again at Dell. I worked there during the day and used my lunch break and after hours to run my business. In the dream, I worked somewhere else and ran the business on the side.

Worst dream ever. My world was upside down a hundred ways. Customers calling, family wondering what was going on. Good grief…It seems like such a simple idea: work at the reliable, safe job and build “your business” on the side. One day it will be big and you can quit your job. Yea! The perfect plan.

When you run a business, there are a million ways to die. That actually might be on the low side; there might be five gillion ways to die.

No customers
No money
No products
No credit
No profitability
No scaleability
No reputation
No innovation
No employees
No way to grow
No way to shrink
No time because you are busy working your other job.

On and on and on. Combine each little piece of each little thing and there are a million quadrillion kazillion ways to die.

But there is good news: There are just as many ways to live. Just as many paths out of the mire to get you on the way to winning. Each lever can be pulled or pushed. Each challenge can be massaged or moved. Each piece of the puzzle creates an infinite number of ways to move this here, push that there and BOOM you have found the code.

One day you’ll have the right formula. One day there will be ducks and a row and organization and growth and profitability for you if only you will keep tweaking the levers.

And it will be awesome. “I didn’t say it would be easy. I said it would be worth it.”

The internet is getting smaller. Well, to me it is. I am usually finished reading the internet before 8am. Everything I want to read for the day has been read and I’m off to do more productive things.

I used to have dozens of sites bookmarked and RSS feeds and saved links. It used to take me all day to consume the internet. Years ago, I had days at work where I could literally go a full 8 hours without getting a single thing done because I was surfing the web. Don’t lie – you’ve done it too.

ESPN.com….CNN.com…DrudgeReport….BoxOfficeMojo…Tyler….on and on and on. There’s lots of internet out there to read so you’d better get started.

Only now I don’t open my Twitter feed. I’ve never been big on Facebook. I skip the news sites. I take in the occasional Grantland article or read the headlines on Hacker News when I’m walking to the car. But no more Boy Genius or TechCrunch or Altucher Confidential. No more Engadget or TUAW or SI.com. I don’t open ClutchFans or The Atlantic or The Economist or whatever.

For some reason, it all started to run together. And it all seemed unimportant. I reached a tipping point where it didn’t seem to matter so much what someone else thought about the Foxconn plant in China or the Yankees decision to bench A-Rod. There is just so much of “it” that none of it sticks out. Lots of noise, very little signal.

You know what? I don’t miss it much. And I don’t feel uninformed or unentertained. I didn’t become dumb by ignoring vast parts of the internet. In fact, I’m probably a bit smarter for doing so.

So now I’m going to work, and then this evening I’ll probably go outside and do something non-internety. And I’m sure if I have seller’s remorse and return, the internet will be waiting for me with entirely new content tomorrow. Until I get back, enjoy Delta Spirit doing “White table”

As I was trying to put our daughter to bed Saturday night, an infrequent but extremely annoying thing happened: a smoke detector began to let out its *chirp* that it was in need of a fresh set of batteries. The thing would chirp, our dog would bark for 45 seconds, there would be 15 seconds of silence, and then the whole thing would happen again. Finally, after a few cycles of this I abandoned any hope of Operation Child Sleep. I put the dog in the closet and grabbed the ladder to change the batteries. It could be worse – the guy who lives in the house around the corner broke his leg in three places last summer when he fell of a chair while changing smoke detector batteries in the middle of the night.

Which got me thinking: I can’t remember the last time a smoke detector in my house needed to new batteries in the middle of the day. It always seems to happen at night, usually when everyone is asleep and in no condition to go to the garage for the ladder and a 9 volt.

So why not add a feature to smoke detectors that prevents the “middle of the night chirping noise” problem?

How about an internal clock that registers what time it is? Too complicated/expensive? Ok, how about a light sensor that knows to chirp if it senses light (a room light is on or sunlight is coming in the window) and one that stays quiet if its dark? What about a chirp that grows progressively louder starting when the battery has 10% of its life left – so it’s almost inaudible at first and SLIGHTLY increases volume every hour until it is changed? That way if it starts chirping at 2am, it might not be loud enough to notice until later the next evening when you are home from work sipping a beer and watching Sportscenter.

The tradeoff is minimal – my house has 13 smoke detectors. The odds that I will be turned in to embers because the ONE night I didn’t change the batteries my house catches on fire and the other 12 smoke detectors don’t work is a risk I’m willing to take.

Is it a huge problem that smoke detectors go off at night when they need new batteries? No, but it is a problem that is solvable that would make people a little happier, even if they never knew it.

My iPhone was running slow yesterday. And I didn’t have enough room to update to iOS6. So I started deleting photos. And then deleted some more. And some more. And the next thing I knew I had deleted 926 photos off of my phone and still had about 1,000 to go.

That’s a lot of photos. Most of mine are of my daughter and/or wife. They all make me smile (I have them saved to a computer, so I wasn’t really “deleting” them). To go through all of the photos and remember the time of each one would take days. There were good photos, blurry photos, fifteen photos of the same thing…The magnitude of special moments captured was a little overwhelming (although there is something to be said for the diligence required to take 48 different pictures of a two year old watching cartoons).

But because of the sheer number of photos I had, it made it easier to take some of them off of the phone. There are still hundreds to look at. And there will be more tomorrow and the next day and the next day.

The photos my parents have from my childhood are abundant but its nothing like now. You used to have to get out the camera, take the photo, take the film to the developer, wait a few days, and then you got your pictures back. There was a process to being able to remember the moments. Maybe they ended up categorized in an album like “Trip to Disneyland ’85” or they ended up in the bottom of a drawer. But it was different because it took time to make the whole thing happen and that in itself made each photo special. I still remember my mother at the Fox Photo, going over every roll and deciding which ones to keep and which to toss.

Now, if you want a picture you can have one in a moment. You can tweet it or share it or keep it to yourself.

The number of photos that exist of my grandparents before the age of 18 can be counted on two hands. The number of photos that exist me before the age of 18 probably number in the hundreds. That includes photos Mom took and yearbooks and everything in between. And to think that yesterday I had 1900 photos on my phone, most of them of a child that just woke up and wants to watch “toons.”

Some of this discussion shows a fundamental misunderstanding of online advertising and data collection. I’ll explain shortly, but first, my thoughts on the IPO.

I’m actually fairly bullish on FB stock, just not at this price level. 100x earnings and 100 billion dollars? Essentially the stock offering priced out at least 2 or 3 years of growth. Good for those that already had options, but there is a ceiling on what the stock can do for a while. IMO they could triple their revenue/earnings and the stock might not move at all. If it gets down to 23-25 or so I’ll be buying as much as I can.

Anyway, the discussion about paying for the service or charging for business pages is silly. Similarly silly are all of the recent articles about people not seeing any return from FB ads. This should come as a surprise to no one – for ads to work, the person viewing them has to be complicit in receiving the message. Ads work on Google because when people go to Google they are almost always LOOKING FOR SOMETHING. Google’s ad platform monetizes them finding what they need. Facebook does no such thing. Visitors to FB do not go to FB to shop, they go to stalk ex-girlfriends and post pictures of their pets or whatever.

I don’t think anyone (including the FB people) think that their on-site ad platform is ever going to generate much revenue. But the point of the on-site ad platform may not be to generate revenue but rather to dial in the ad platform itself. The FB-based ad platform is a testbed/sandbox for FB to match ads to people and test algorithms and such….

…which leads to how FB is going to make a zillion dollars.

Recently, FB changed their ToS to allow FB to track you when you are not on the FB site. THis means that when you go to another browser window or a different site, FB has the ability to follow you. So everywhere you go on the internet, FB is able to go with you and the treasure trove of data they have is with them. Which is why they will be launching an AdWords/AdSense competitor in the not too distant future. They don’t care about making money off of you while you’re on FB (outside of teenagers buying virtual goods in games). Rather, they give you the FB platform to use for FREE so they can collect scores of information about you. Eventually they will have a platform for publishers that delivers on site revenue to publishers like Google does, only the ads they serve will have higher conversion rates because they are REALLY atuned to you and your likes and dislikes, more so than Google.

The challenge FB faces is time of engagement on the site, not so you might click on an ad but so they have time to collect more info about you. They need “horizontal” engagement….right now that average FB user is on the site less than 4 minutes a day IIRC. The longer you are on FB, the longer your friends are on, the more data they can collect about what ads to serve you on their new ad platform. By creating the app store a couple weeks ago, they are opening the door up for the same creative types that made the Apple app store so successful to come in and make the FB ecostystem full of new games and business services and tools and other stuff…..all things intended to make you come to facebook more often so they can collect more data and thus make more money when you leave FB.

People talk about their challenge in mobile being about monetizing a mobile site, which is silly. They don’t need to run ads on a FB app…they just need to make it full featured enough that you interact with it the same way you interact with FB on the desktop. They bought Instragram for this reason. They will continue buying properties that people engage with. Not so they can run ads on those properties, but so they can get more info about you.

The stock will slowly slide for the next 6-18 months. And when the ad platform is announced the stock will double in a week. Black dot it, put it ink.

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